Smart Contract - How Do Smart Contracts Work in Real Life

Ethereum was one of the blockchain that introduced the smart contract into the blockchain world. And ever since there comes various types of the smart contracts to perform different use cases and the executions.

So what are these smart contracts? How do they work? And where can you learn more about the smart contracts?

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Image Credit: Youstory

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What is a Smart Contract?

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In blockchain world the two users being anonymous, it was hard to create the trust for various types of transactions. Smart contract basically establishes an agreement between the two parties that allows them to perform actions which at the end of the successful execution completes the contract.

E.g. You buy some service from the freelancer and the money is kept through the smart contract into the escrow. In such case the freelancer needs to be successfully complete the work. Once both party agree to work being completed, the smart contract fulfills. And then escrow can release the money.

What are the use cases of Smart Contracts?

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You can do a lot of work through smart contracts. For example, buyer of whole seller can release the shipment after receiving the money. Freelancer can get paid through smart contract. Smart contracts can also be used for the financial products too. Like you stake the money like you do the money in deposits in bank. And you earn some staked rewards along the way.

What is the future of the Smart Contracts?

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Smart contracts have made their way into the industries like remittance, shipping, logistics, manufacturing, production and education too. Currently the decentralized finance is the most hot area where the smart contracts are making their way in and also helping people trust the system where they can make money for their staked investments.

Which Blockchains make use of the Smart Contracts?

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Ethereum being the first blockchain to get into the smart contracts, many other blockchains followed through like TRON too. You can find blockchains like - NEO, WAVES, NEM, Hyperledger are making use of the smart contract.

Conclusion

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Today we don't have to rely on the middle men and the people who are taking a lot of interest for our efforts in staking. Banks, insurance companies, mutual funds and even the education system will be soon making sue of the smart contract in their everyday operations.

There is a lot of stuff that you can do with the smart contract and soon those smart contracts would get complex and evolve as the time moves ahead.